Question

Company Overview

United Parcel Service, Inc. (UPS or 'the company') is one of the largest package delivery companies in the world. It provides various logistics services, including less-than-truckload services as well as supply chain management operations in more than 220 countries and territories. The company operates globally with major presence in North America and Europe. It is headquartered in Atlanta, Georgia.

The company reported revenues of (US Dollars) US$60,906 million for the fiscal year ended December 2016 (FY2016), an increase of 4.4% over FY2015. In FY2016, the company’s operating margin was 9%, compared to an operating margin of 13.1% in FY2015. In FY2016, the company recorded a net margin of 5.6%, compared to a net margin of 8.3% in FY2015.

Given your understanding of the company described in the handout, address the following.

a) Briefly discuss the company’s business-level strategy and describe its target market. Take care to share how the company is able to pursue this business-level strategy .

b) Briefly discuss the corporate-level strategy pursued by the company. Take care to discuss the level of diversification the company uses .

c) Identify and describe one weakness, opportunity, and threat (three in total) the company should address to achieve its desired performance goals. Take care to offer two potential strategic solutions for each item identified in part c (six in total) .

Answer 1

a) Business-level strategy

The strategy has never been trifled with for UPS. Month to month gatherings of groups explicitly shaped to imagine the future and evaluate choices have constantly assumed a huge job in UPS's way to deal with low-cost the executives and separation through quality client care. The mix of these methodologies makes a conventional business-level strategy underscoring quality as dependability. By distinguishing their situation on the worth creation wilderness, the targets of an organization can turn out to be all the more unmistakably characterized. It is through such ID that has driven UPS to change its statement of purpose, further distinguishing objectives and purposes at the association in their industry and market sections.

As an organization that centers around low cost and quality, it is significant for UPS to make a basic move towards every one of these ways to deal with separation. These activities have happened into substantial and non-unmistakable potential results for the organization. The organization has made its own arrangements of terms and standards by allowing their organization to adjust to client needs while remaining inside similar parameters sketched out by the organization. UPS can remain in front of the opposition by continually investigating what's to come. By knowing where they need to be, later on, the chiefs can check whether every venture, practical level strategy, business-level strategy, or innovative progression will help or hurt the organization. UPS attempts to exploit all potential mechanical headways, remaining consistent with the legacy of the organization.

UPS has committed its choice procedure and strategy to low cost and quality through productivity and unwavering quality of administration. They do as such by concentrating on the significance of estimating alternatives, separation, finding the market request, having a quite certain cost structure, and concentrating on their specific industry and market serious structure, which is exceptionally significant in an effective situation at the business level. By distinguishing their strategy and remaining completely dedicated to it, UPS's activities and strategy are one of incredible worth. This worth is exponential because of the way that UPS is in an exceptionally serious market. The administrations offered by UPS are practically identical to those of FedEx and DHL.

b)  Corporate-level strategy

Low Level of Diversification

United Parcel Service (UPS) utilizes this strategy. As of late UPS produced 74 percent of its income from its U.S. bundle conveyance business and 17 percent from its worldwide bundle business, with the staying 9 percent originating from the association's non-bundle business. UPS may turn out to be progressively broadened, both as far as the products and enterprises it offers and the number of nations in which those merchandise and ventures are advertised. If this somehow happened to occur, UPS would almost certainly turn into a modestly enhanced firm.

c) Weakness, Opportunity, and Threat

Weakness:

Overdependence on US Markets:- the US is the biggest market of United Parcel Service and records for the biggest piece of its income. Nonetheless, that leaves the brand excessively subject to the US for income and development.

Strategic solutions

• Fund responsibility for the property through low loan costs to expand the extent of the claimed property to the leased property.
• Increment marketing to pull in shoppers to spend.

Opportunity:

Digital marketing openings:- Digital innovation has brought phenomenal new open doors for organizations all around the globe. Marketing, client commitment, flexibly chain, and in a few additional zones digital innovation has brought incredible open doors for organizations. UPS spends a great deal on the IT foundation. It can utilize it for better client relationship the board just as for advancements.

Strategic solutions

• Utilize its quality on social media for marketing and to pull in clients towards its site.
• Grow earth benevolent items through development, easily so they could be sold at a low cost.

Threat:

Competitive threat:- Competition has developed from both little and enormous brands. DHL and FEDEX are the two significant contenders of UPS. There are a few different brands too that are rivaling UPS and which are going after a piece of the overall industry with UPS. The higher rivalry has prompted higher use of marketing and different things.

Strategic solutions

• Increment spending on research and advancement to empower UPS to all the more likely rival rivalry.
• Utilize a solid distribution system to connect with clients and fend off new contestants into the market.